Reforming Employment Protection Legislation

Transcription

1 Reforming Employment Protection Legislation Peer Review on Dismissal Law 2.0. How to promote work-to-work transitions and sustainable labour relations The Hague, 22 october 2015 Pieter van Winden

2 Introduction Fundamental reform in 2015: Work and Security Act Three main elements: Employment protection permanent contracts Employment protection flexible contracts Unemployment benefits Important consequences for work-to-work transitions and sustainable labour relations.

3 Structure of presentation A. Labour market background B. Aims of the reform C. Employment Protection flexworkers D. Unemployment Benefits E. Employment Protection permanent contracts F. Conclusion

4 A1. Strictness of EPL: Temporary contracts

5 A2. Strictness of EPL: Regular contracts

6 A3: Share of temporary employment Netherlands EU21 OECD 5 0

7 A4: Labour market mobility

8 A5: Dual Labour Market Six main characteristics: Low protection flexible contracts High protection regular contracts High share of flexible employment Low transition of flexworkers to regular contracts Low labour mobility of older workers High share of long term unemployed

9 B1. Aims of the reform Improve the position of flexworkers Better protection Better perspective on regular contract In order to improve employability Make Dutch dismissal law fairer and less complex Facilitate job transitions by making Unemployment Benefits and Dismissal law more activating

10 B2: Ideal behind the Work and Securtity Act

11 C. Protection of flexible workers Fixed term contracts Maximum cumulated duration of FTC s: from 3 to 2 years. Maximum number of FTC: remains 3 FTC s counted as successive with interval =< 6 months Other issues No Non-Compete-Clauses in temporary contracts No trial period for temporary contracts =<6 months Counteract abuse of payrolling, contracting, etc.

12 D. Changes to UB proposed approach Elements public system Maximum duration: from 38 months to 24 months In steps of 1 month per quarter between 2016-I and 2019-II. Build up of rights slowed down 1st 10 years: 1 month per year, then ½ month per year After ½ year: all work acceptable Social partners become more important: Sectoral arrangements to supplement the public UB Larger role in activating and reintegrating the unemployed

13 E. Amendment of dismissal law Old Dual preventive system: Termination via PES: no severance payment Exceptions: Social Plan or Unfair Dismissal Termination via courts: high, age dependent severance payment Three problems: Dual system leads to unequal outcomes, depending on choice employer Age dependent severance payments lead to less mobility, especially for older workers Severance payments may be used as early exit route into retirement

14 E. Amendment of dismissal law proposed approach Make it fair and simple Route no longer dependant on choice employer One route for dismissal for economic reasons Via the Employee Insurance Agency (UWV). One route for dismissal for personal reasons Via a district court From severance payment to Transition allowance Principle: all dismissals receive transition allowance 1 st 10 years: 1/3 month per year, then ½ month per year Transition allowance depends on tenure, not on age Transition allowance more strongly aimed at job-to-job transitions Deduction of costs for e.g. outplacement or vocational training

15 F: Conclusion Aims are set, legislation has come into force Focus now on implementation in practice: how do employers and employees react? To what extent will the new Transition allowance be used to improve job-to-job transitions? Will the better protection of fixed term contracts lead to more regular contracts? Communication campaign to support the aims: showing good practices. Closely monitoring the effects. Full evaluation in 2020.